Start-up sees new picture for digital television

Broadcast data to PCs, that's what.

Geocast said yesterday it is working on technology that delivers data such as software programs, video, and information services at superfast speeds to PCs. It does so via airwaves reserved for the transmission of high-definition digital television (HDTV) signals to a device--to be priced at under $300--that can receive and store the signals on a large hard disk drive. A regular Internet connection is still needed to send information, such as a request to purchase something, back out over the Internet.

Still, if Geocast delivers on its promise when the service starts at the end of 2000, it could finally give broadcasters at the major TV networks financial incentive to move forward with HDTV.

And they don't have much time. The networks are required by the Federal Communications Commission to begin digital broadcasts in the top 30 markets by November 1999, but the high cost of the new sets has limited sales, despite the better picture and sound quality HDTV sets offer. Also, local and network broadcasters haven't been producing very much content for the sets because of the cost of new equipment and converting film libraries to the new HDTV formats.

Geocast isn't going to be the only game in town with this technology, however. Sarnoff, a TV pioneer that helped develop digital TV standards, has already formed a venture called inTelecast that is set to launch by the end of the year.

Some of the possibilities for local broadcasters include adding longer video clips from newscasts or offering real-time commute information. A user could map out her commute route and get feeds from video cameras along the way to get updated information on traffic, suggested Liz Gebhardt, director of programming strategy.

Another intriguing strategy: Local affiliate TV stations will be able to offer short-form programming from programmers such as ESPN or CNBC, which are currently only available on cable and satellite networks. Ads can also be targeted to audience members, Gebhardt noted.

The possibilities have caught the interest of some high-powered investors. Hearst-Argyle Television, which owns 22 stations and reaches nearly 18 percent of U.S. households, is Geocast's first network partner and has invested $10 million in the company. Three of the biggest names in Silicon Valley venture capital--Mayfield Fund, Kleiner Perkins Caufield & Byers, and Institutional Venture Partners--have all pitched in money, the first time all three have invested in the same company, according to Geocast.

New possibilities for broadcasters
But networks are in a quandary. Limited viewers means it has been hard to pay off the expensive system upgrades and new antenna towers required for HDTV. New equipment can cost anywhere between $2 million and $5 million for each local affiliate of the big four broadcasters. The cost goes up to between $8 million and $10 million if the local station wants to produce its own programming such as a newscast in HDTV.

But broadcasters can also "multicast," which means that one spot on the TV dial can now be filled with both lower-quality channels and data services far faster than regular dial-up modems.

An HDTV channel is essentially a big data pipe sending a maximum of 19.4 megabits per second (mbps) down to a digital TV. A portion of this--up to around 7 mbps--is reserved for data transmission with the Geocast system, which is a far cry from today's common 53 kilobytes per second for dial-up modems. The Geocast receiver even has a processor and hard disk drive, so that information can be downloaded when the computer is off. Because there are plenty of PC users interested in high speed connections, broadcasters stand a better chance of making money from datacasting than HDTV in the near term.

As recently as last year, the jury was out in regards to broadcasters' plans for datacasting, said Gary Schultze, president of Multimedia Research Group. But now, "The Internet has everybody's serious attention. Broadcasters are starting to see a potential loss of viewers to other kinds of entertainment," Schultze said. And that means companies have to look at datacasting to supplement their programming and create new advertising opportunities, he said.